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Shanghai Banxia unwinds bet on China property rebound

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Just two months after predicting a major rebound in the domestic real estate sector, Chinese macro hedge fund Shanghai Banxia Investment Management Center, has slashed its holdings in property stocks on the back of an ongoing decline in values, according to a report by Bloomberg.

The report cites an investor letter seen by Bloomberg as revealing that the firm’s flagship Banxia Macro Fund slumped 9.8% in May, the biggest monthly loss since at least 2018, after it sold property-related shares and cut commodities positions. 

The pivot by Banxia, which was among the most bullish investors in April, supports the view that the sector’s turnaround will take longer than previously hoped. Property sales rebounded briefly in the first three months of the year, but faltered again in April and May, dropping back below a level seen in the final quarter of 2022, according to Banxia founder Li Bei.

The firm now expects the sector to bottom out in the first half of next year rather than the past quarter as previously estimated.

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